There is a very interesting Bloomberg article on SIGTARP — the entity charged with putting some oversight on the TARP funds.

Almost as an aside, the article notes that “The secrecy that enveloped the [AIG] deal was unwarranted” and “could result in criminal or civil charges.”

The rest of the article focuses on SIGTARP and its chairman, Neil Barofsky.

As an example, it discusses how Treasury, in response to demands for those same notorious AIG emails, tried to play a little poker with the new agency. Geithner’s Treasury asked the Justice Department “for a ruling on whether Barofsky and SIGTARP reported to Secretary Geithner.” Barofsky called Turbo Timmy’s bluff — and told the Treasury Secretary he reported only to the President, and not to the head of the department he was investigating. (Treasury then withdrew its request).

That gives you a sense of how SIGTARP operates.

Since Congress authorized the $700 billion in TARP funding in October 2008, the Treasury has committed $489.8 billion, and disbursed $380.3 billion as of the end of Q1 2010. So far, institutions have repaid $180.8 billion.

Excerpt:

“SIGTARP has more than 40 agents, including former Secret Service, Federal Bureau of Investigation and Internal Revenue Service investigators, who sport blue windbreakers emblazoned with the SIGTARP seal.

In its late-January report, SIGTARP said that the banks rescued by TARP remained “too big to fail.” They still have an incentive to make risky wagers in order to generate the profits that will reward their executives, the report says.”

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “SIGTARP: AIG Coverup Criminal Charges?”

The investigations are only beginning and will continue for a decade or more.

Remember that the Pecora Commission was at least the fourth, and not the last, investigation into malfeasance following the last bubble of comparable magnitude. There are a lot of reputations still to be destroyed.

Really? Blue windbreakers emblazoned with some nonsensical acronym and everything? Are they going to set up snipers outside Goldie’s headquarters, waiting on Paulson to reappear?

This is so surreal. Sorta like the drug war. Create a problem, then show how effectively it can be solved through the application of a force backed up by all those nuclear-tipped warheads. Anytime you see the blue windbreakers, you know the government is doing nothing more than trying to justify its existence.

In particular: “One reason par was paid was because some counterparties insisted on being paid in full and the New York Fed did not want to negotiate separate deals, says a person close to the transaction. “Some of those banks needed 100 cents on the dollar or they risked failure,” Vickrey says.”

God… can we stop with the incessant regulatory non-sense? I mean, I get it… promote the book. But all the Washington stuff is costing everyone money. That was an ’08 story… there are some great earnings and companies stories. And its not like the people hear really “care” about govt waste and bailouts… if so, there is far more waste and fraud in Iraq/Military spending or in Medicare spending (every single year!).

There are better stories -

I estimate iPad will ADD roughly $1/shr to next Qs AAPL earnings. They would’ve blown-out without it. It could be a killer Q. It will explode at the holidays.

Banks have turned the credit cycle (love how all the bears on this blog just ignore Q data, profits, etc). If regulators to quiet down a bit, we’ll get a FULL restart of C&I lending and consumer credit. Who wants to see 5-7% GDP growth?

NFP will continue to move upward and may even accelerate. In overly simple terms, two months of +500k takes 1% off the unemployment rate. I think we will get MORE than two of those in a row before the end of year. No reason (again, if regulators quiet down)… no reason we cannot see sub-8% unemployment rate by year end.

“The secrecy that enveloped the [AIG] deal was unwarranted” and “could result in criminal or civil charges.”

It would certainly be delicious if, after Geithner tried to assert non-existent authority over SIGTARP, then Barofsky ended up nailing Geithner (and Hank Paulson) with civil or criminal charges over the secret handout to AIG’s counterparties. Please, God, please.

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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